A hotel under construction on Meadow Road in Asheville./ photo by Jason Sandford

The Planning and Economic Development Committee of Asheville City Council, made up of council members Julie Mayfield, Vijay Kapoor and Vice-Mayor Gwen Wisler, voted unanimously on Thursday afternoon (Aug. 29) to recommend that the full council consider a 1-year moratorium on any new hotel development within the Asheville city limits. City Manager Debra Campbell sat in on the meeting.

The background: To set the stage, Todd Okolichany, the city’s planning director, sketched the recent development history of hotels in Asheville. (Here’s his full presentation.) He said more than 2,760 hotel rooms have been approved in Asheville since 2015, with 1,344 having opened. More than 1,000 new hotel rooms have bee approved in downtown within that period and 654 have opened, he said. Residents have expressed growing concerns about hotel development and their impacts, Okolichany added, such as the displacement of other businesses and their burden on the city’s infrastructure.

The current process of approving hotel developments requires approval from Asheville City Council, which is working without concrete policies and strategies, Okolichany said. That leads to a lack of direction, uncertainty for developers, staff and residents and can result in a “hostile development climate in the community,” he added.

Council members spoke up. Referencing the displacement issue, Mayfield asked how many new hotels were built on vacant lots versus others. Kapoor asked Okolichany to get specific data regarding topics such as the wages hoteliers pay and how much hotel owners pay in property tax. Mayfield added, “Let’s be really accurate.” Wisler said she wanted to know and understand the history of hotel occupancy rates during recessionary periods. She said she wanted to know the impact of hotels, and a moratorium, on city water system usage. She also said she wanted to be sure she knew the process for bringing forward UDO amendments.

City Attorney Brad Branham talked about the legalities of imposing a moratorium. A city clearly has the power to implement such a moratorium under state law and can invoke an option that a moratorium is needed to allow for the development of regulations for a particular land use. A moratorium must have a specific time limit, Branham said, with most lasting six months or one year. An ordinance must have a clear statement of actions to be taken during the moratorium period. Branham added that the city must think of a moratorium as a last option, and show that it has considered other options. That standard is fairly easily met, he said.

As to the timing of approving of an ordinance, Branham said it would require two meetings of City Council: one meeting to set a public hearing, and a second to hold the public hearing and vote. Asheville City Council is scheduled to meet Sept. 10.

Branham added a couple of caveats: Moratoriums don’t apply to properties with a vested right there-in, he said, meaning any project that already has a valid building permit or has received zoning approval from City Council. Also, any aggrieved party can petition a court seeking an injunction and receive an expedited hearing, he said.

The development team of the next hotel project in the pipeline seeking approval from City Council watched the proceedings. The mixed-use project, known as Create 72 Broadway, calls for a 138-room hotel, 37 condos and six affordable rental units to be built in a 9-story building on Broadway Street. Greensboro-based developer Birju Patel listened alongside Peter Alberice, head of MHAworks architectural firm, and attorney Jacqueline D. Grant of the Asheville law firm of Roberts & Stevens. Patel said his project is scheduled to be heard at City Council on Sept. 10, but declined any other comment. Here’s the background.

One other side note: A developer is interested in establishing a new kind of lodging use in Asheville described as individually owned short-term rental units managed by a company, Okolichany said. But that project won’t be ready for City Council any time soon, he added.

Okolichany returned to the podium to explain a proposed two-phased planning process to be undertaken during a moratorium. First, the city would hire a consultant, the Urban land Institute in Charlotte, to provide expertise. A kick-off event would give an overview of the hotel industry, note impacts and best practices, and offer small group discussions. A second phase would involve research and analysis. He said the city might need a market demand analysis. There would be a community engagement. The goal is to research and develop policies that would result in specific updates to the city’s Unified Development Ordinance.

How much would it cost to hire that consultant or produce that market analysis? Okolichany didn’t say. But the process would take a year, he said.

After a relatively short public comment period, council members weighed in with their comments. Kapoor said he welcomed the planning process and the data and pragmatic advice it would bring. Kapoor also challenged “those of you in the media to focus on what we’re going to do next and what consensus we can come up with,” rather than on the halt of development. Mayfield said “we probably should have had this conversation in 2016” when public concern began coming to a head. She said she looks forward to the conversation around hotel development.

To Kapoor’s point: What are some examples of how other cities and counties around the country are regulating hotels? My brief look around offered a few examples: some cities have creates special zoning districts to keep hotel development concentrated in a specific geographic area; some cap the number of rooms allowed; others also require a minimum number of rooms. The Asheville Planning & Zoning Commission has been urging City Council to develop a regulatory framework for hotels for a couple of years now. Chairwoman Laura Hudson has a beginning: does a hotel development proposal displace other businesses? Does it activate the ground level in some way? Does it provide parking?